1. Work out each employee’s ESCT rate

You only pay ESCT on cash contributions to an employee’s super scheme. For KiwiSaver, this means you pay ESCT on your compulsory 3% employer contribution — and any voluntary extras — but not on the contributions deducted from your employees' wages or salary.

At the beginning of each tax year, you’ll need to work out the ESCT rates for your staff. This will vary as it’s based on each employee’s salary or wage, and how long they’ve worked for you.

If an employee worked for you for the entire previous tax year, base their ESCT rate on the total salary or wage received, plus the total employer cash contribution you made in the previous year.

If they worked for you for only some of the previous tax year, their ESCT rate will be based on their estimated salary and wages for this income year, plus your estimated total employer cash contributions.

The ESCT rates are:

Employee's income for year ended 31 March (including gross employer cash contributions)

ESCT from 1 April

$0 to $16,800

10.5%

$16,801 to $57,600

17.5%

$57,601 to $84,000

30%

$84,001+

33%

You’ll need to work out the rate each year as your employee’s salary may change.